Rotman School of Management fuels financial innovation

We have a choice of where we can expand our operations, and we choose Ontario.

As the second-largest financial centre in North America, Toronto is headquarters of the Canadian financial sector. Many large finance companies are based here; and the region is also home to a burgeoning number of financial start-up companies, particularly those focused on artificial intelligence (AI), digital payments and robo-advising.

And while our competitive economy and early government investments in innovation continue to fuel Toronto's financial services leadership on the world stage, it's the province of Ontario's leading universities and incubators that are helping to develop the practical experience of skilled talent that enter the marketplace each year. Among them: The University of Toronto's Rotman School of Management.

The University of Toronto has long led the way in producing top-notch financial talent for local and international markets

In 2014–15 alone, the numerous incubators and accelerators at the University of Toronto (U of T) worked with 226 student-led start-up teams and produced 79 registered companies, the most of any institution across Canada.

With the introduction of the Rotman School of Management's Financial Innovation Hub in Advanced Analytics ("FinHub") in November 2017, U of T has been making even greater strides to spur financial innovation and entrepreneurship in the Ontario market and beyond.

Rotman FinHub brings students, start-ups and researchers together to drive the future of local and international fintech innovation

Supported with a $1-million donation from TD Bank and a $1.3-million commitment from the Rotman Catalyst Fund, the FinHub model provides a collaborative ecosystem in which students, the financial industry and faculty learn from each other, to develop cutting-edge technology and incubate ideas in financial innovation.

The program is based on three fundamental pillars:

Exposing innovative approaches and agile methodologies, while introducing emerging disciplines such as machine learning, blockchain, and advanced data programming languages, like Python. Programs are developed through a combination of coursework, special projects, presentations, research input and other contributions made by advisors from three different areas at U of T: the Rotman School of Management, the Faculty of Applied Science & Engineering, and the department of computer science.

Tapping into strong ties within the financial industry, and specifically, Toronto's technology ecosystem, which is "among the best in the world," according to Christian Nelissen , TD Bank's senior vice-president. In tandem with Big Six bank–representation, Toronto also plays host to more than 4,000 active start-up firms and 200 fintech companies.

Cultivating an exceptional level of talent through program work, projects, conferences and symposia, the highest-performing Master- and Bachelor-level students work with leading researchers, instructors and advisors from various departments to deliver ground-breaking fintech solutions to the marketplace.

Andreas Park, Associate Professor of Finance at U of T and Director of Research at the Rotman FinHub, articulates of the program's vision: "We're trying to do multiple things [with the FinHub initiatives]. We're working to push Rotman's agenda forward, but we're also helping smaller firms to access industry-leading talent and knowledge that they wouldn't otherwise have access to. And it helps our students to gain more practical experience and get out into the marketplace, to engage with firms and potentially, help them to build career connections even before they've finished their education."

It's a model that makes sense to participants, too. The first round of sponsored projects launched on May 1 and included the following six industry participants: Blue Pier, CogniFrame, Karen.ai, Overbond, TD Bank, and Vexo.

In blurring the lines between academia and industry, both sectors benefit, suggests Fotios Saratsiotis, president of Vexo Technology Solutions. "It's one thing to come out and say that you've done some research and learned the skills. But for students to be able to work in the industry, and with faculty who are on the leading edge of fintech innovation, that's a huge resource. The way that Rotman FinHub has been able to mesh the two is a really positive initiative."

Other industry partners agree. James Pierlot, lawyer and founder of pension start-up Blue Pier notes, "Conceptually, the FinHub model provides an opportunity for students to learn, so it meets the educational institution's needs. It also meets the government's need to support innovation in a meaningful way. And it meets the business's needs of getting some real work done. It just makes good sense all around."

Likewise, Overbond CEO Vuk Magdelinic lauds the initiative: "We're a big supporter but also a beneficiary of programs like the Rotman FinHub. It's a two-way street, and it's a big win-win for academia and industry partners alike."

Multidisciplinary approach an important hallmark of the Rotman FinHub mission

Unlike many of the other incubators and accelerators at the university—including Rotman's Creative Destruction Lab; the faculty of Engineering's The Hatchery; and the ICUBE business accelerator at the Institute for Management & Innovation at UTM—the FinHub takes a unique, multidisciplinary approach that allows for crosspollination between students, instructors and industry professionals across three different disciplines. It's a key differentiator, suggests Kathleen Coulson, Executive Director of Rotman's Capital Markets Institute and Associate Director of Rotman FinHub, and a hallmark of the program design as a whole.

"We put a lot of thought into the mix of students and mentors, and recognized that participants from different disciplines bring a lot of value to what we're trying to accomplish. So, while the computer science and engineering students often bring tremendous skills in driving data, Rotman students are trained in strategy, to know how to drill down to the right data that make methodology like machine learning work most effectively. Together, our FinHub students are able to dissect the problem from various angles, hone in on the right data and solutions, and know how to apply them to solve the industry's most pressing problems."

Catherine Marsh, COO of Blue Pier, concurs: "We like the model of one or two Computer Science or Engineering students partnered up with an MBA, with the academic oversight. That degree of collaboration is a sensible model that, for Blue Pier, is already proving its worth."

Partners already experiencing the benefits

Said Visweswaran (Vish) Ramakrishnan, founder and CEO of CogniFrame: "Rotman FinHub is helping to build an ecosystem that can learn together, uniting talent, information and knowledge from across the [Ontario] region in one place, assimilating that knowledge, and then putting it forward in a form that can be diffused across a wide variety of participants. Gaining access to students who have the technical skills CogniFrame needs in machine learning has been a tremendous benefit, and as we grow, if we're looking for talent, Rotman FinHub will be the place to find it."

James Pierlot and Catherine Marsh of Blue Pier were similarly impressed with the combination of capabilities, knowledge and discipline displayed by Rotman FinHub students and mentors. "We were encouraged by the initial interest the students had to working with us [for their Summer Project term]. We found the students to be really engaged and we're already seeing from their work that this is going to generate real value for all partners involved."

Concludes Park of the contribution that the Rotman FinHub program aims to make to the Ontario finserv sector as a whole: "Toronto is one of the fastest-growing technology markets in North America and one of the world's largest innovation hubs. Yet, as the financial industry continues to change at a rapid pace, we'll need to stay on top of the industry and learn as things change. That's what we're working to accomplish with Rotman FinHub: To contribute to that evolution—to have the ability to lead the way and to actively push financial sector innovation forward."

Adds Coulson: "Our responsibility is to launch our students with the skills they need, so that industry knows that they go to Rotman FinHub for these types of competencies. This is a huge opportunity for students to gain knowledge and experience, and for our students and faculty to make a difference in the Ontario market as a whole. This is the future of our school, and it's of vital importance to get this right."

Toronto, Ontario is the clear choice for finserv innovation

If you ask the current slate of Rotman FinHub start-ups about their choice of locales to run their businesses, their responses are unequivocal.

Said James Pierlot of his pension start-up: "For Blue Pier to function effectively and deliver on its mandate, it's essential that it's based in Ontario. And if you're going to work in finserv and fintech, you've got to have a presence in Toronto, which has the largest critical mass of expertise in fintech, asset management and actuarial science. It's difficult to imagine running Blue Pier in another province or city."

Likewise, Vuk Magdelinic had an array of different locales to choose from when he started Overbond in 2015 (including New York City, where he had worked for a Big 5 bank and still maintains ties). Yet, he chose Toronto for two very specific reasons. The first being that his company is able to take advantage of academic institutions, including University of Toronto, University of Waterloo and the whole host of academic centres along the Corridor that harness and produce very talented engineers. Secondly, favourable economic factors in Ontario mean that he could afford to jumpstart the operation, bringing impressive talent on board, while keeping budgets in check. Now, a little over two years later, he remains bullish on the Ontario tech sector and its propensity for growth and innovation: "We have a choice of where we can expand our operations, and we choose Ontario."